Oil Taxation Act 1975 section Sch 3 para 4

Oil delivered in place of royalties to be disregarded for certain purposes

Schedule 3 paragraph 4 requires that oil delivered to the Oil and Gas Authority as royalty payments under a petroleum licence must be excluded from certain profit and oil allowance calculations.

• Oil delivered to the OGA as royalty under a Petroleum Act 1998 licence is excluded from specific PRT calculations
• Royalty oil is disregarded when calculating market values for assessable profits and allowable losses under section 2(5)
• Royalty oil is also excluded from a participator's share of oil won and saved when determining the oil allowance under section 8(3) and (4)
• The effect is that royalty oil does not inflate a participator's taxable profits or consume their oil allowance entitlement